Valero Energy Corporation (VLO)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	3,755,000	11,858,000	15,690,000	2,130,000	-1,579,000
Total assets	US$ in thousands	60,143,000	63,056,000	60,982,000	57,888,000	51,774,000
Operating ROA		6.24%	18.81%	25.73%	3.68%	-3.05%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $3,755,000K ÷ $60,143,000K
= 6.24%

Valero Energy Corporation's operating return on assets (operating ROA) has shown fluctuating trends over the past five years. In 2020, the operating ROA was -3.05%, indicating that the company's operating income generated was insufficient to cover its asset base. However, there was a significant improvement in 2021, with the operating ROA reaching 3.68%, suggesting a better utilization of assets to generate operating profits.

The company's operating ROA continued to improve in 2022, jumping to 25.73%, indicating a substantial increase in operating profit relative to its assets. This sharp increase could signify improved operational efficiency or strategic decisions that led to higher profitability.

In 2023, the operating ROA remained strong at 18.81%, although slightly lower than the previous year. This level of performance suggests that Valero Energy continued to effectively generate operating income from its asset base.

By the end of 2024, the operating ROA decreased to 6.24%, indicating a decline in operating profitability relative to its assets compared to the previous year. It could be important for the company to analyze the factors contributing to this decrease to maintain or enhance its operational performance.

Overall, Valero Energy Corporation's operating ROA has shown significant variability over the past five years, with notable improvements and fluctuations. This metric serves as an important indicator of the company's efficiency in generating operating income from its asset base, highlighting the need for consistent monitoring and strategic decision-making to maintain and enhance profitability.